Apple’s foray into Television

No one knows for sure what Apple is working on for a breakthrough into the Television business. But expectations are high that Apple would announce something quite dramatic this fall.

No, they are not going to introduce a new piece of TV hardware. Plenty of high-tech TV’s are available from the likes of Samsung, Sony, etc. What Apple will do is revolutionize the content business for the consumer, much like what it did with the music business via iPod and iTunes.

I just read this:

The television industry is based on cable and advertisers setting up assorted tollbooths between the viewer and what they want to watch. Getting to your show means paying a cable bill, running through a buggy user guide, and sitting through commercials.

What if you could just pay for whatever you wanted when you wanted it? That would change the entire industry. That’s most likely what Apple’s working on and the revolution could be led by ESPN.

ESPN is owned by Disney and Apple has a very close link with Disney (the CEO of Disney sits on Apple’s board and the late Steve Jobs sat on Disney’s board after selling Pixar for $7.4B). Apple could provide ESPN directly to viewers for a fee which should be cheaper than what cable companies charge. What about the same for HBO? The cable industry pays for contents and sells them to the viewer as various expensive packages. Apple may bring the “liberation” and easier choice to viewers. That would shake up the cable industry for sure.

Of course Disney would not like to alienate the cable companies because of the revenue stream it collects from them. So the deal with Apple would be tricky.

Even Apple’s simple device AppleTV enables wireless transmission between your computer and the TV set. It claims to sell 3 million units of that per year. A revamped iTune store with better contents such as ESPN, HBO and the like, would be welcome at last.

So let’s wait till the fall for Apple’s announcement!

Yahoo – the CEO drama continues

Four CEOs in five years! Yahoo was a symbol of innovation and success in its first few years of life. Founded by two Stanford Ph.D. students (Yang and Filo), Yahoo defined the Internet era of communities and sharing. It still has an enviable community using various services like email, finance, news, etc. It has lost much advertising dollars to Google. Terry Semel came from Hollywood and wanted to make it a media company. That did not work. Terry flew in every week on a private jet from LA to San Francisco and was driven in a limo to work every day. His compensation was way higher than many other CEOs at similar valley companies. Jerry Yang returned as CEO for the second time and botched up a lucrative offer from Microsoft. Yang was no Steve Jobs on his second return to the company he founded. He turned down the Microsoft offer to buy Yahoo at $47 per share (current share is $15.50). There was indeed an “identity” crisis at Yahoo.

Then came Carol Bartz and she talked tough and tried to straighten out the confusion, but results did not show any positive impact. She was let go last year, after being fired over phone from the board chairman. Then the board picked Scott Thompson, a well-reputed executive from Paypal (eBay) to head the company just a few months ago. He started reducing redundancy and bring clarity to Yahoo’s core business. He let go 2000 employees recently. Several top skills left the company. As he was settling in, came the news that his resume had information on his degree that is not right. Most likely that error existed for a while, but one disgruntled investor questioned his integrity and the board on not doing due diligence before hiring him as CEO. Yahoo and Scott did a poor job responding to this and the result was his departure yesterday.

With all the business problems at Yahoo and its anaemic growth, a strong leader is needed to refocus the company on what it is best at – innovating new solutions for keeping the community loyal. After all, Yahoo gave many technologies such as Hadoop and HDFS in managing Big data. Without a strong execution-oriented CEO,  it will fade away like many dot-com era companies.

It is hard to believe that Yahoo was once valued at $100B (current valuation $18.9B).

Post-Facebook – Micro Social Networks

I am on Facebook, but not an active user at all. Also I am reluctant to share too much personal stuff with friends. Then there are long-lost friends and family members popping up with Facebook requests to connect. I do not feel anxious to connect as it would increase more “gossip” time I want to avoid.

But then, Facebook with 900 million users is heading for it’s much-anticipated IPO in 2 weeks. The prediction is that it will be a $100B valuation on the first day of treading. Now people like me who are less enthusiastic users have some alternative choices appearing. Three such companies have started attracting users – Path, FamilyLeaf, and Pair. These micro-social network sites foster “sharing that is intimate by design”.

Let us talk about the anthropologist Robin Dunbar of Oxford University, who has done research on social behavior of humans. He says, social networks are like concentric circles and 150 seems to be the outer bound, meaning that is the effective neurological limit the human brain can handle. In other words, 150 is the maximum number of “friends” and this is called the “Dunbar Number”. Then he says 50 is the number of “trusted friends”, 15 are “good friends”, and 5 are “best friends”.

An average Facebook user in the US has 245 friends, well above the Dunbar number. Then this number gets mixed up with family members, friends, and workplace colleagues. Users sometimes share stuff to certain friends they did not want to.

This has led to the creation of a new start-up called Path by Dave Morin, ex Facebook employee. He says, “Facebook has made socializing on the Internet normal. But now there is an opportunity to return to intimate socializing.” He started with an upper limit of 50 friends per user and last year increased it to 150. It is available only on smart-phones and boasts over one million users already. Its user has an average of 40 friends.

FamilyLeaf is restricted to family members only and even more restrictive. Pair, started by Canadians just connects to one friend, hence the name. It is available only on smart-phones. These two companies were funded by Y Combinator from Silicon valley.

It is interesting to see how the social networking is entering its next phase.